FINANCIAL MANAGEMENT

MEANING
Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise.

Scope/Elements
Financial Planning Financial Control Investment decisions includes investment in fixed assets (called as capital budgeting). Financial decisions Dividend decision

Functions of Financial Management

Estimation of capital requirements Determination of capital composition Choice of sources of funds Investment of funds Disposal of surplus Management of cash Financial controls

Objectives of Financial Management

To ensure regular and adequate supply of funds to the concern. To ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations of the shareholders. To ensure optimum funds utilization. Once the funds are procured, they should be utilized in maximum possible way at least cost.

Contd
To ensure safety on investment, i.e, funds should be invested in safe ventures so that adequate rate of return can be achieved. To plan a sound capital structure-There should be sound and fair composition of capital so that a balance is maintained between debt and equity capital.
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MNC
A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation

Features of MNC
1. Big size 2. Huge intellectual capital 3. Operates in many countries 4. Large number of customer 5. Large number of competitors 6. Structured way of decision making
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INDIAN

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MERITS OF MNC
1. MNCs create employment opportunities in the host countries. It helps to create a pool of managerial talent in the host country. 2. Helps removal of monopoly and improve the quality of domestic made products. 3. Promotes exports and reduce imports by raising domestic productions. 4. Goods are made available at cheaper price due to economies of scale.
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MERITS OF MNC
5. Job and career opportunities at home and abroad in connection with overseas operations. 6. Encourages the world unity and all resulting in world harmony

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DEMERITS OF MNC
1. The host county is likely to lose its economic sovereignty 2. The host nation may also experience some loss of control over its own economy 3. Feeling that labour is being exploited by the MNC/ Outsourcing 4. Lost of cultural moorings 5. The problem of Dumping
Example Chinese products are priced low in indian market.
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Thank you

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